LI Hooters stores re-branding; one closing

Hooters in Farmingdale, above, and Fresh Meadows will be renamed Bud’s Ale House; the East Meadow eatery will close and the one in Islandia will become 58’s — all part of a franchise dispute. (Feb. 5, 2010) Credit: Bruce Gilbert

The Long Island Hooters franchisee will re-brand some of its operations and close one location after relations soured with its corporate franchisor, Hooters of America Llc, of Atlanta.

The Hooters restaurants in Farmingdale and Fresh Meadows in Queens will be renamed Bud's Ale House, and the Hooters in East Meadow will close, said a spokesman for the franchisee, Strix Restaurant Group. The Islandia Hooters will be renamed 58's, to reflect its location off Exit 58 of the Long Island Expressway. Bud's and 58's are not franchises.

Hooters of America said there are plans for another franchisee to open up to five Hooters on Long Island soon.

Earlier this month, Hooters of America said it had terminated a franchise agreement with Strix and its owner, William Harley, because Strix was not paying the franchiser a portion of its gross sales. The company also filed a lawsuit against Strix in state court in Georgia and sent it a cease-and-desist letter to stop using the Hooters name.

Ed McCabe, the lawyer for Strix, said the company already planned to convert the Hooters to new operations, but the franchise termination sped up the process. Hooters of America was not supporting the business as it had agreed to in the original contract, McCabe said. He added that the two parties had been negotiating since last year, when Strix stopped making payments to the corporate Hooters.

"It's like . . . a marriage that's gone very bad," he said. "We couldn't make money as a Hooters, and we have to move on."

Hooters of America's lawsuit, filed in September, seeks damages of at least $440,000 for what it says Strix owes.

"In the unfortunate circumstance that a franchisee is not complying with its obligations . . . we must take actions to protect our concept," Hooters of America chief executive Terry Marks said in a news release earlier this month.

McCabe said it is likely that Strix will file for bankruptcy in order to reorganize. Bud's Ale House operates under a new corporation named AS Wings, also owned by Harley. The new operation will be a regular sports bar, and will employ both male and female servers. A Bud's Ale House is already operating in Astoria.

This is not the first time Strix's Hooters franchise has faced legal challenges. In September, a Korean-American man sued Strix, saying an employee at the Fresh Meadows Hooters used a racial slur to identify him on a receipt.

Strix owner Harley, of Massapequa, is also a money manager. Earlier this month, Harley's former investment firm, Fursa Alternative Strategies, was sued by a Pittsburgh nonprofit for failing to return a $2 million investment.